MUMBAI: Lenders of debt-ridden Reliance Capital have voted overwhelmingly in favour of a resolution plan submitted by Hinduja Group firm IndusInd International Holdings Ltd (IIHL), which made the highest cash offer of Rs 9,661 crore and was the lone bidder in the second round of auction.
As much as 99% votes were in favour of IIHL as lenders expected to recover cash upfront of Rs 9,661 crore from the Hinduja Group entity, according to the sources. Voting on the IIHL resolution plan started on June 9 and ended on Thursday.
Besides, cash balance with Reliance Capital of over Rs 500 crore would also go to lenders. Lenders are expected to receive about Rs 10,200 crore for distribution as against Rs 16,000 crore principal secured debt, resulting in 65 percent recovery for the lenders, sources said.
RCap Administrator is likely to file IIHL resolution plan in NCLT Mumbai next week as the deadline of July 15 to file is approaching. The Committee of Creditors had set a minimum bid amount of Rs 9,500 crore for the first round and Rs 10,000 crore for the second round (in April this year), with an additional Rs 250 crore for subsequent rounds.
The second round of auction was held on April 26 after the Supreme Court allowed the lenders to go ahead with the extended challenge mechanism in order to maximise the recovery from the sale of Reliance Capital’s assets. However, according to sources, any decision on the resolution of Reliance Capital by the CoC will be subject to the outcome of the SC’s judgement in the appeal filed by Torrent Investments.
The resolution process of Reliance Capital was mired into litigation after the first round of auction.
Following the closure of the first round, the Hinduja Group firm submitted the bid post auction date. The post-auction bid is being contested by Torrent Investments in the Supreme Court as it was the highest bidder in the first round of auction. Reliance Capital is currently facing claims totaling Rs25,334 crore from secured and unsecured financial creditors under the IBC. The approval of IIHL’s resolution plan by the Committee of Creditors marks a significant step forward in the ongoing efforts to find a resolution for Reliance Capital.
Administrator may file resolution plan next week
RCap Administrator is likely to file IIHL resolution plan in NCLT Mumbai next week as the deadline of July 15 to file is approaching. The Committee of Creditors had set a minimum bid amount of Rs 9,500 crore for the first round and Rs 10,000 crore for the second round (in April this year), with an additional Rs 250 crore for subsequent rounds